Prostate cancer (PCa) is the most commonly diagnosed malignancy and the second leading cause of cancer death in American men. However, the etiology of this disease is not fully understood, which hampers the improvement of treatment for a large segment of PCa patients. The TMPRSS2-ERG gene fusion results in aberrant overexpression of fusion/truncation ERG in approximately 50% of all human PCa, suggesting a causal role of ERG in PCa. Notably, overexpression of fusion ERG alone is insufficient to induce PCa in mice; but can cooperate with other lesions such as deletion of the Pten tumor suppressor gene in prostate tumorigenesis, although the underlying mechanisms are largely unknown. Forkhead protein FOXO1 functions as a key downstream effector of PTEN by transcriptional upregulation of genes that induce apoptosis and cell cycle arrest, implying that FOXO1 is a tumor suppressor. This concept is supported by findings that FOXO1 is frequently inactivated in human cancers, such as PCa, by AKT and CDK1 and CDK2-mediated phosphorylation/nuclear exclusion due to PTEN loss, genomic deletion and transcriptional downregulation. To date, however, the precise role of FOXO1 inactivation in prostate tumorigenesis remains elusive. Our preliminary data demonstrated that FOXO1 binds directly to and inhibits the transcriptional and oncogenic activities of fusion ERG in PCa cells. We showed that silencing of FOXO1 upregulates the expression of endogenous fusion ERG target genes and increases the recruitment of fusion ERG onto its target gene loci. We further showed that depletion of FOXO1 in combination with fusion ERG overexpression promotes prostatic epithelial cell transformation in vitro and tumor formation in immune-deficient mice. Additionally, our ChIP-on-chip analyses in mouse embryo stem (ES) cells identified Foxo1 as a putative target of the Polycomb protein Ezh2, activation of which promotes gene silencing by catalyzing trimethylation on histone H3 lysine 27 (H3K27me3). We further demonstrated that EZH2 knockdown or pharmacological inhibition of EZH2 increases FOXO1 expression in human PCa cells. These preliminary data lead to our central hypothesis that inactivation of FOXO1 results in aberrant activation of fusion ERG and that aberrantly activated fusion ERG cooperates with FOXO1 deficiency to promote prostate tumorigenesis. We further hypothesize that EZH2 plays an essential role in mediating transcriptional downregulation of FOXO1 in PCa cells. To test these hypotheses, first we will determine the molecular mechanism, role in tumorigenesis and the clinical significance of FOXO1 inhibition of fusion ERG in PCa (Aim 1); second we will determine the mechanism, disease relevance and preclinical therapeutic application of EZH2 repression of FOXO1 in PCa (Aim 2). Upon completion, findings from this innovative application will not only yield basic insights into genetic and biochemical mechanisms that drive PCa development and progression; but also have significant clinical implications in identification of new targets and development of novel therapeutics for PCa therapy, thus strongly influencing the PCa field both scientifically and clinically.